Crude rises for a second day, reclaiming $95

Energy futures broadly higher; U.S. natural gas inventories fall

By

MomingZhou

SAN FRANCISCO (MarketWatch) -- Crude-oil futures, extending the prior session's gains, traded up more than 2% to surpass $95 a barrel on Thursday, while natural-gas futures also moved higher as U.S. inventories fell.

Crude for March delivery rallied $2.19, or 2.3%, to close at $95.46 a barrel on the New York Mercantile Exchange. It earlier surged to an intraday high of $95.60. The crude contract had gained 49 cents a barrel on Wednesday, after government data showed weekly U.S. crude inventories rose less than expected.

Meanwhile, March natural-gas futures closed up 38.4 cents, or 4.6%, to $8.772 per million British thermal units. The Energy Information Administration reported Thursday U.S. gas inventories fell 120 billion cubic feet to 1,942 billion cubic feet. The inventories have been fallen for nearly three months.

EIA reported on Wednesday U.S. crude inventories rose 1.1 million barrels, much less than a rise of 3.2 million barrels expected by analysts surveyed by Platts.

"The inventory report could also be considered supportive since the build in oil stocks was below estimated, while refinery operations picked up and imports fell," said John Kilduff, an analyst at futures brokerage MF Global.

On the economic outlook side, Japan on Thursday reported strong economic growth, with fourth-quarter gross domestic product rising at an annualized rate of 3.7%. Japan is the world's third-largest oil consumer after the U.S. and China.

Further supporting Thursday's crude prices is the weaker dollar.

The dollar index, which tracks the value of the greenback against a basket of other major currencies, slid 0.2% to 76.22 after Federal Reserve Chairman Ben Bernanke said the central bank is ready to cut interest rates further if fresh signs of a weaker-than-expected economy emerge. See The Fed.

A weaker dollar tends to make prices of dollar-denominated commodities, such as crude oil and gold, higher.

Also on the Nymex, March reformulated gasoline rose 8.62 cent to $2.4761 a gallon and March heating oil gained 5.1 cents to $2.6666 a gallon.

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